8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of report (Date of earliest event reported): February 7, 2008

Diamond Offshore Drilling, Inc.

(Exact Name of Registrant as Specified in Charter)

Delaware	1-13926	76-0321760
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

15415 Katy Freeway
Houston, Texas 77094

(Address of Principal Executive Offices and Zip Code)

Registrant’s telephone number, including area code: (281) 492-5300

Not Applicable

(Former name or former address, if changed since last report)

     Check the appropriate line below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. Results of Operations and Financial Condition

     On February 7, 2008, Diamond Offshore Drilling, Inc. issued a press release announcing its financial results for the fiscal quarter and year ended December 31, 2007. A copy of such press release is furnished herewith as Exhibit 99.1.

     The information furnished in this Current Report on Form 8-K, including Exhibit 99.1, is being furnished pursuant to Item 2.02 of Form 8-K and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and will not be incorporated by reference into any registration statement filed under the Securities Act of 1933, as amended, unless specifically identified therein as being incorporated by reference.

Item 9.01. Financial Statements and Exhibits

(d) Exhibits. The following exhibit is furnished pursuant to Item 2.02 of Form 8-K:

Exhibit number		Description
	99.1	Press Release dated February 7, 2008

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SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

DIAMOND OFFSHORE DRILLING, INC.
By:	/s/ William C. Long
	William C. Long
	Senior Vice President, General Counsel and Secretary

Dated: February 7, 2008

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EXHIBIT INDEX

Exhibit number		Description
	99.1	Press Release dated February 7, 2008

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EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE	CONTACT: Les Van Dyke
	Director, Investor Relations
	(281) 492-5370

DIAMOND OFFSHORE DRILLING, INC. ANNOUNCES
FOURTH QUARTER/YEAR-END 2007 RESULTS

Houston, Texas, February 7, 2008 — Diamond Offshore Drilling, Inc. (NYSE:DO) today reported net income for the fourth quarter of 2007 of $164.9 million, or $1.19 per share on a diluted basis, compared with net income of $221.4 million, or $1.60 per share on a diluted basis, in the same period a year earlier. Net income for the fourth quarter of 2007 includes $58.6 million, or $0.42 per share on a diluted basis, of non-recurring tax expense related to the distribution of previously untaxed earnings from one of the Company’s foreign subsidiaries to its U.S. parent. Revenues for the fourth quarter of 2007 were $666.7 million, compared with revenues of $578.2 million for the fourth quarter of 2006.

For the year ended December 31, 2007, the Company reported net income of $846.5 million, or $6.12 per share on a diluted basis, compared with net income of $706.8 million, or $5.12 per share on a diluted basis, for the year ended December 31, 2006. Revenues for the year ended December 31, 2007 were $2.6 billion, compared with $2.1 billion for 2006.

Diamond Offshore provides contract drilling services to the energy industry around the globe and is a leader in deepwater drilling. Additional information on Diamond Offshore Drilling, Inc. and access to the Company’s SEC filings is available on the Internet at www.diamondoffshore.com.

As previously announced, Diamond Offshore will provide a simulcast and rebroadcast of its fourth quarter/year-end 2007 earnings release conference call. The live broadcast of the Diamond Offshore Drilling, Inc. quarterly conference call will be available online at www.diamondoffshore.com on February 7, 2008, beginning at 9:00 a.m. Central Time. The online replay will follow immediately and continue for the remainder of the first calendar quarter after the original call. Please go to the web site at least 15 minutes before the broadcast to register, download and install any necessary audio software.

Statements in this press release may contain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements may include, but are not limited to, statements concerning existing contracts, commitments and backlog, fleet enhancements, access to new markets, future earnings, future cash flows, market conditions, future market improvements, future growth in demand for equipment types or in any region and future contracts. Such statements are inherently subject to a variety of risks and uncertainties that could cause actual results to differ materially from those anticipated or projected, including, among others, the risk that a Letter of Intent will not

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be converted to a contract, the risk that full rig utilization may not be achieved during a contract period, the risk that the fleet’s available days may be reduced by unscheduled downtime, the risk that these and other factors outside of the Company’s control may adversely impact the amount of profit realized from a contract, the risk that the markets for the Company’s services will not continue to improve, the risk that the Company’s market position may deteriorate, or the risk that the Company may not be able to participate fully in any future market improvements. A discussion of additional risk factors that could impact these areas and the Company’s overall business and financial performance can be found in the Company’s reports and other filings with the Securities and Exchange Commission. These factors include, among others, general economic and business conditions, casualty losses, industry fleet capacity, changes in foreign and domestic oil and gas exploration and production activity, competition, changes in foreign, political, social and economic conditions, regulatory initiatives and compliance with governmental regulations, customer preferences and various other matters, many of which are beyond the Company’s control. Given these concerns, investors and analysts should not place undue reliance on forward-looking statements. Each forward-looking statement speaks only as of the date of this press release. The Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statement to reflect any change in the Company’s expectations with regard thereto or any change in events, conditions or circumstances on which any forward-looking statement is based.

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DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share data)

	Three Months Ended						Twelve Months Ended
	December 31,						December 31,
	2007			2006			2007			2006
Revenues:
Contract drilling	$	651,578		$	555,618		$	2,505,663		$	1,987,114
Revenues related to reimbursable expenses		15,124			22,580			62,060			65,458
Total revenues		666,702			578,198			2,567,723			2,052,572
Operating expenses:
Contract drilling		291,360			212,786			1,011,193			812,057
Reimbursable expenses		12,631			20,382			52,857			57,465
Depreciation		63,646			51,645			235,251			200,503
General and administrative		16,238			11,765			53,483			41,551
(Gain) loss on disposition of assets		(3,165	)		(1,127	)		(8,583	)		1,064
Casualty gain on Ocean Warwick		—			(500	)		—			(500	)
Total operating expenses		380,710			294,951			1,344,201			1,112,140
Operating income		285,992			283,247			1,223,522			940,432
Other income (expense):
Interest income		7,439			11,037			33,566			37,880
Interest expense		(2,232	)		(5,418	)		(19,191	)		(24,096	)
Gain (loss) on sale of marketable securities		41			22			1,796			(31	)
Other, net		4,327			5,539			6,844			12,147
Income before income tax expense		295,567			294,427			1,246,537			966,332
Income tax expense		(130,626	)		(73,072	)		(399,996	)		(259,485	)
Net Income	$	164,941		$	221,355		$	846,541		$	706,847
Income per share:
Basic	$	1.19		$	1.71		$	6.14		$	5.47
Diluted	$	1.19		$	1.60		$	6.12		$	5.12
Weighted average shares outstanding:
Shares of common stock		138,801			129,186			137,816			129,129
Dilutive potential shares of common stock		230			9,615			1,129			9,652
Total weighted average shares outstanding		139,031			138,801			138,945			138,781

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DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES
RESULTS OF OPERATIONS
(Unaudited)
(In thousands)

	Three Months Ended
	December 31,
	2007			2006
REVENUES
High Specification Floaters	$	261,805		$	221,171
Intermediate Semisubmersibles		302,914			222,723
Jack-ups		86,859			111,724
Total Contract Drilling Revenue	$	651,578		$	555,618
Revenues Related to Reimbursable Expenses	$	15,124		$	22,580
CONTRACT DRILLING EXPENSE
High Specification Floaters	$	94,895		$	58,250
Intermediate Semisubmersibles		137,822			97,273
Jack-ups		53,431			46,201
Other		5,212			11,062
Total Contract Drilling Expense	$	291,360		$	212,786
Reimbursable Expenses	$	12,631		$	20,382
OPERATING INCOME
High Specification Floaters	$	166,910		$	162,921
Intermediate Semisubmersibles		165,092			125,450
Jack-ups		33,428			65,523
Other		(5,212	)		(11,062	)
Reimbursable expenses, net		2,493			2,198
Depreciation		(63,646	)		(51,645	)
General and administrative expense		(16,238	)		(11,765	)
Gain on disposition of assets		3,165			1,127
Casualty gain on Ocean Warwick		—			500
Total Operating Income	$	285,992		$	283,247

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DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)

	December 31,			December 31,
	2007			2006
	(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	637,961		$	524,698
Marketable securities		1,301			301,159
Accounts receivable		522,808			567,474
Prepaid expenses and other		103,120			88,216
Total current assets		1,265,190			1,481,547
Drilling and other property and equipment, net of accumulated depreciation		3,040,063			2,628,453
Other assets		36,212			22,839
Total assets	$	4,341,465		$	4,132,839
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities	$	453,011		$	333,509
Long-term debt		503,071			964,310
Deferred tax liability		397,629			448,227
Other liabilities		110,687			67,285
Stockholders’ equity:
Cumulative effect of FIN 48 adoption		(28,422	)		—
Other stockholders’ equity		2,905,489			2,319,508
Total stockholders’ equity		2,877,067			2,319,508
Total liabilities and stockholders’ equity	$	4,341,465		$	4,132,839

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DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES
AVERAGE DAYRATES AND UTILIZATION

	Fourth Quarter					Third Quarter					Fourth Quarter
	2007					2007					2006
	Dayrate		Utilization			Dayrate		Utilization			Dayrate		Utilization
	(Dayrate in thousands)
High Specification Floaters	$	317		81	%	$	302		85	%	$	253		95	%
Intermediate Semis	$	218		78	%	$	186		78	%	$	155		82	%
Jack-ups	$	115		63	%	$	112		81	%	$	113		81	%

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